FIGS, Inc. Reports 1.8% Revenue Growth but Significant Decline in Net Income for Fiscal Year 2024

FIGS, Inc. reported its financial results for the fiscal year ending December 31, 2024, revealing a modest increase in net revenues to $555.6 million, up 1.8% from $545.6 million in the previous year. However, the company experienced a significant decline in profitability, with net income dropping to $2.7 million from $22.6 million in 2023, resulting in a net income margin of 0.5%, down from 4.1%. The decrease in profitability was attributed to rising costs, particularly in selling and marketing expenses, which increased by 13.4% and 14.9%, respectively, as the company invested in its fulfillment operations and marketing campaigns.

In terms of operational metrics, FIGS reported an increase in its active customer base, which grew by 3% to approximately 2.7 million as of December 31, 2024. The average order value (AOV) decreased slightly from $115 to $113, indicating a potential shift in customer purchasing behavior. The company also noted a decrease in gross margin, which fell to 67.6% from 69.1%, primarily due to an unfavorable product mix. The total operating expenses rose to $373.4 million, representing 67.2% of net revenues, compared to 62.8% in the previous year.

Strategically, FIGS completed a significant transition of its fulfillment operations to a new facility in Goodyear, Arizona, which is expected to enhance efficiency and support future growth. The company incurred approximately $14.1 million in capital expenditures related to this transition. Additionally, FIGS is in the process of transitioning away from a key supplier in Jordan due to labor condition concerns, which may pose challenges and additional costs in the short term.

Looking ahead, FIGS aims to expand its international presence, currently shipping to 32 countries outside the U.S. The company is also focused on enhancing its product offerings and customer engagement through its digital platform and Community Hubs. Despite the challenges posed by macroeconomic factors, including inflation and geopolitical tensions, FIGS remains committed to its mission of serving healthcare professionals and plans to continue investing in brand marketing and product innovation to drive future growth. The company has also authorized a share repurchase program of up to $100 million, reflecting its confidence in long-term value creation for shareholders.